The introduction of competition in the marketplace does not mean regulation is unnecessary. Quite the contrary, the role of the regulator actually increases once governments authorize competition (See Figure 5-A), particularly during the early stages of transition from the former model of monopoly provision to one of effective competition. In order to transition to an effective competitive environment, regulators must establish a regulatory framework that can resolve disputes, address anticompetitive abuses, protect consumers, and attain national goals such as universal access, industrial competitiveness or economic productivity and growth.[1]
Figure 5-A: Need for Regulation
Source: Telecommunications Management Group, Inc.
As noted in Figure 5-B below, regulation is not an end in itself. Rather it is the vehicle to attain, and subsequently sustain, widespread access, effective competition and consumer protection. The liberalization and introduction of competition in the market requires strategic policies and regulations that establish an effective regulator (as discussed in Chapter 5), remove explicit barriers to entry ( e.g., the inability to interconnect with the incumbent operator), and dismantle implicit barriers (such as the potential influence of the incumbent telecommunications operator over the regulator). As such, regulatory reform must include measures aimed at:
1. creating independent entities to oversee the introduction of competition in the market and establish regulatory mechanisms for issues such as interconnection, licensing, and tariff rebalancing,
2. preparing the incumbent operator to face competition, including timetables setting deadlines for the termination of market exclusivities,
3. allocating and managing scarce resources such as numbers and spectrum resources in a non-discriminatory way within the liberalized market,
4. expanding and enhancing access to telecommunications and ICT networks and services, and
5. promoting and protecting consumer interests, including universal service and privacy.
Figure 5-B: Goals of Regulation
Source: Telecommunications Management Group, Inc.
ENDNOTES
[1] International Telecommunication Union, Trends in Telecommunication Reform: Effective Regulation, 2002, at 21.